Lender 路 Lakewood, WA 路 Member since 2021 路 57 posts 路 25 votes
One of the biggest lessons in fix-and-flips is knowing where to spend and where to save. Focus on improvements that buyers notice most, such as kitchens, bathrooms, fresh paint, flooring, and curb appeal before investing in expensive upgrades that may not increase your return.
What renovation has consistently given you the best ROI?
Flipper/Rehabber 路 CA 路 Member since 2023 路 1k+ posts 路 1k+ votes
1mo
The most important part of flipping houses is health and safety of the future occupants. Second is longevity and efficiency of the structure. Cosmetics are last. Anybody can slap lipstick on a pig. A safe grounded & bonded electrical system, drain waste & vent system that isnt sewer outgassing & HVAC that operates efficiently far outweigh finishes. Hardwired & interlocked smoke alarms, CO sensors $ fireblocking, sealing are all extremely important. The vast majority of flips that ive repaired in my lifetime were done by people that cheaped out on the important stuff, just to make a buck.
Flipper/Rehabber 路 CA 路 Member since 2023 路 1k+ posts 路 1k+ votes
1mo
The most important part of flipping houses is health and safety of the future occupants. Second is longevity and efficiency of the structure. Cosmetics are last. Anybody can slap lipstick on a pig. A safe grounded & bonded electrical system, drain waste & vent system that isnt sewer outgassing & HVAC that operates efficiently far outweigh finishes. Hardwired & interlocked smoke alarms, CO sensors $ fireblocking, sealing are all extremely important. The vast majority of flips that ive repaired in my lifetime were done by people that cheaped out on the important stuff, just to make a buck.
Lender 路 Lakewood, WA 路 Member since 2021 路 57 posts 路 25 votes
1mo
Absolutely agree. 馃憦 A successful flip isn鈥檛 just about making a property look good鈥攊t鈥檚 about making sure the work behind the walls is safe, efficient, and built to last. The finishes attract buyers, but quality workmanship protects the investment.
Investor 路 Jackson, MS 路 Member since 2021 路 657 posts 路 559 votes
1mo
Alan hit the nail on the head with his response. We look at some flips that were done on the cheap using finishes made to look high end and can see where the essentials were skimped on. When we buy (remember, money is made on the buy not the sell which many flippers forget) we look at the systems that are behind the wall yet are key to making the property one we are proud to sell. If we take the cheap way out and run from the closing table, we are not doing anyone a service we are proud of. We looked at house one time that was a flip (was looking for one of our friends) and it was promoted as having new 200A service. I pulled the cover off the panel and only 4 of the 20 breakers had wires connected to them and as we checked the wiring, they had tied Romex into knob-&-tube throughout the house. Factor in updating the systems and if you need to save money, look for closeouts on flooring or cabinets.
Flipper/Rehabber 路 Tacoma, WA 路 Member since 2026 路 10 posts 路 2 votes
1mo
The renovation with the best ROI on my flips was not a renovation. It was matching the finish level to the comps that set the sale price, and not one step above that.
Here is how I decide. Before I pick a single finish I pull the three to five renovated sales that will actually be the buyer's, and the appraiser's, comps for this house. If those comps sold with builder-grade quartz, white shaker and LVP, that is the spec, and every dollar above it is a gift to the next owner. If the comp set is split, one tier at, say, $400k for basic renovated and another at $460k for genuinely high-end, the question is not "does a better kitchen add value," it is "can this specific house, on this street, with this square footage, reach the upper tier at all." Usually that answer comes from lot, layout and square footage, not from the tile.
The way I test it is a 3x3 grid: three sale prices (upper tier, middle, the conservative number) against three rehab budgets (base spec, plus 10%, plus 20% for the upgrade). If the upgraded budget only pencils in the top-price box, you are betting the whole deal on the best case. If the base spec still clears the conservative price, that is the deal.
Alan's point is right, and I would add that the behind-the-walls items are also what I price most carefully at the offer stage, because they are the ones the comps never show you. A sold comp with a new panel and a sold comp with a 1960s panel close at the same price.
Siahna, since you are lending around Lakewood and Tacoma: when a borrower's rehab budget comes in with a high-end spec, do you check whether the comps they sent actually support that price tier?
